Jean/fly, here is a summary you may have missed as well.
Three words and four letters that could make you rich!
Sarissa – Keevil – Nemegosenda – SRSR
Add these three words to your investment vocabulary. They add up to billions in minerals for a stock that is still trading under a nickel!
TOP TEN REASONS FOR YOU TO OWN SARISSA
1. Sarissa Resources (SRSR) is a start-up junior mining company, with 5 properties currently. More accurately, it is a mineral exploration company with strong potential to grow into a mining company. This company is still way under the radar affording you the chance to get in at a fantastic price!
2. Scott Keevil, the new CEO, is from mining royalty, a third generation miner. Scott came on board December 1, 2007 with the intention of building value for Sarissa shareholders, which was reiterated in his June 5 and July 8 updates. Scott is not paid a salary, but was given 30 million restricted shares (2 years until Nov 2009). His father Norm Keevil is chairman at Teck Cominco (TCK), and as majority shareholder is valued at $11 billion. Teck Cominco has made clear they are interested in strategic joint ventures. The mining game requires patience, but Scott is in the process of executing all the steps in the proper order, and is so far delivering on his promises. His experience, connections, and compensation structure can only add up to huge increases in shareholder value for himself, and you!
3. Nemegosenda is the first property Sarissa purchased under Scott’s leadership, and the one with the most immediate potential and focus. This northern Ontario property held great promise as a Dominion Gulf study from 1956 indicated niobium on the property. Two samples also indicated various REE (rare earth elements) which are quite valuable. By Texas Ripper’s calculations from information in the Gulf report, the REEs could be worth $10 billion or more. Sarissa has completed the purchase of 7 patented mining claims comprising the property of 2000 acres. They have also recently staked additional claims of 3000 acres adjacent to the west and under the lake, as the Gulf data indicated that major mineralization values may be there. To verify that study, Sarissa commissioned an independent geologist report from Hawk Engineering to verify the Gulf study. Released in May, it confirmed at least $5 billion in niobium in one zone alone, and was subsequently described as a “world-class asset.” Conversations with management unofficially indicate the Hawk report was understated. Wherever there is niobium, there is tantalum. Assay samples from the adit in July 2008 showed there was also tantalum, uranium, thorium, and REEs. We are still not talking about (a) REE’s, (b) other resources such as uranium, (c) the full extent of the D zone, (d) other properties, or (e) resource price increases in the next few years. $5 billion in minerals is huge, and we are very likely talking about several times this number!
4. Ultimately, the company needs to document compliant reserves, known as the NI43-101 standard. Following the Hawk report, the next step is to drill core samples and have them tested for niobium, tantalum, the REE’s etc. The company will drill in Zone D and the East Zone, which both have most promise. A vendor is being selected and drilling should proceed in the very near future. Sarissa has set up offices on site and in the nearby town of Chapleau. In the press release for the Hawk Report, Scott Keevil indicated redrilling of Zone D “will be a little like shooting fish in a barrel.” Roads were cleared for drilling in June. The company also indicates a 580 foot adit from 50 years ago is dry and in good condition to rehabilitate and will assist with this phase. A second phase of drilling of core samples and testing will be required to ultimately meet the standard. At this point, it seems very possible that this second phase would also occur in 2008. They are also digitizing the Gulf data. From people knowledgeable of the process, phase one drilling is most critical to shareholders and potential partners in proving the reserves, and subsequent testing is more of a routine process. When the results of this testing are made public and confirms the mineral resource at Nemegosenda, the stock will pop!
5. Niobium is used in steel production. Tantalum is used in electronics. The REE’s are critical to many modern products, including batteries, headphones, disc drives, cell phones, etc. China currently controls most of these markets. More details on these elements and their uses are easily available on the web. See http://www.americanelements.com/nb.html for Niobium, and click on the various other elements. Also see Eric Hommelberg’s article (http://www.kitco.com/ind/Hommelberg/may282008.html) for an explanation of how these mineral companies are at an eight-year low and are expected to reverse in the next couple of years. These elements are in demand and of limited supply, which points to stable or rising prices!
6. Recently hired geologist Dr. Cam Cheriton is a top name in his field with 50 years experience in the mining industry and a Harvard degree and adds considerable credibility to Sarissa. Sarissa has also just (June 2008) appointed seasoned mining industry veteran and project geologist, Alan A. Hawke B.Sc. M.Sc to its Board of Directors. Mr. Hawke, currently based in Tianjin, China, will offer his considerable experience to assist Sarissa in the ongoing exploration program of its Nemegosenda carbonatite deposit and extensive industry connections to source new and compelling exploration properties for the Company's property portfolio. In a 30 year career on three continents, Mr. Hawke has operated in key managerial roles -- encompassing mine development and construction management. Keevil – Cheriton – Hawke – it keeps getting better!
7. Sarissa is currently suffering from being a pinksheet stock, where pump and dump is rampant. The company is taking steps to uplist to an exchange where it will have more credibility, as well as access to many investors that can’t or won’t touch a pinky. Specifically, they have engaged an auditor for its financial statements. A press release is expected soon, although the actual uplisting is likely several weeks away. Investor Relations has recently indicated that they will first uplist to the OTCBB exchange, and subsequently the TSX.V exchange. The company obviously believes the current share price “grossly undervalues” the company, and indicates that insiders have been buying the stock on the open market as well. While a pink sheet stock does not have to disclose more details, the company has indicated that approximately 450 million of the 740 million shares are “tight”. 264 million are restricted, and the rest being held by people close to the company that are holding for much higher values. When Sarissa uplists, the added credibility and transparency, and the new investors will likely cause the share price to rise significantly!
8. Sarissa has four choices – (a) develop the mine themselves, (b) get bought out, (c) take on a partner or joint venture, or (d) a Chinese off take agreement. From conversations with the company, the last two are more likely, and are better for shareholder value. It has been suggested that Scott Keevil wants to make Sarissa his legacy and is not interested in selling out. A Chinese off take agreement is where the Chinese guarantee they will buy the entire product at market prices or at an agreed floor price, and put up the resources for Sarissa to extract the minerals. The company is obviously developing these options but has not yet had to disclose them. Once the uplisting and drilling results are in, an announcement should follow soon after. This announcement transfers the company from an exploration to a mining company, and the stock price will rise accordingly!
9. The value of the company once it has compliant reserves is dependent on the total resources available, the price of these elements, and the percentage put on these mining companies. Shareholders estimate significant price increases when the stock is uplisted, when the first core sample test results are available, and ultimately when the reserves are compliant. Also important would be the announcement of their extraction method. Estimates of the potential for this company vary widely, but once uplisted and initial tests are complete in 2008 the stock could conservatively reach $0.30 to $0.60. Once compliant reserves are established and the JV or method of financing extraction are complete, and evaluation of its other properties potential is known, the stock could trade between $1 and $5 in the 3-5 year time frame. Valuation estimates based on companies on similar tracks (Commerce Resources) indicate the company could be valued at 5-20% of NI43-101 reserves. Commerce stock spiked to 10.8% of the value of its resources once they became known. Applying this percentage to Sarissa and using $15 billion in niobium and tantalum only at Nemegosenda results in an estimate of $2.28 per share. Again this does not include REE’s, other properties, or commodity price increases. Even if only a portion of this valuation comes to fruition short term, with the stock trading for pennies, the potential is enormous. Long term, this estimate is conservative!
10. The major downside risk to this company according to Scott Keevil is a commodity price collapse for niobium, which given the recent price increases, and the continued need for steel, batteries, and gadgets, is not very likely. Recently niobium prices increased from $26 to $32. Scott Keevil has indicated that even with a significant price decrease, there was plenty of profit to be made. Extraction costs are estimated at 35% - 40%. They have a “world class asset” which will be verified (not if, but when), and the only possible downside is a collapse in niobium prices!
SRSR is currently trading under .03 per share. Incredibly, since the Hawk report came out, verifying the mineral resources, the stock has mostly drifted lower. This is primarily attributed to the pink stock environment dominated by market makers and their practices, although the June 5 update made clear that 154 million shares became unrestricted recently, which applied some selling pressure.
BOTTOM LINE: A company with billions in reserves and stellar management very concerned about shareholder value suffering from pink sheet status is making all the right moves and is currently trading for pennies! Truly a retirement investment opportunity! Watch for uplisting, drilling test results, NI 43-101 compliance, extraction plans, and other positive management surprises!
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